The Interior Ministry claims that “illegal exchange” helped clients transfer money overseas by posing as a travel agency.
Moscow, Russia, police claim to have closed down a “cross-border” cryptocurrency exchange that they believe assisted users in sending money overseas.
The exchange operators allegedly pretended to run a travel agency, according to officials. However, the agency was really a front for a foreign cryptocurrency exchange, according to the police.
Additionally, according to police, the alleged exchange handled cryptocurrency transactions totaling $2.2 million for Russian customers.
‘Cross-Border Crypto Exchange’ Charged 1% Commission Fees – Ministry
In a Telegram post from the Russian Interior Ministry, a spokesperson explained that they had conducted a raid on the suspected exchange’s officers.
Authorities believe the operators engaged in “illegal banking activities” and collected 1% commission fees from clients who paid with cash and desired to send money to cryptocurrency wallets located abroad.
A video of the agents raiding the office was released by the ministry. It shows officials from the ministry going through bundles of US dollars, receipts, and computer hardware.
In the video, officers are also seen questioning a male employee and inquiring about the company’s activities. The staff member replies:
“We didn’t do anything. We conducted crypto exchange transactions. And nothing else.”
Along with “cash in various currencies,” the ministry said that it also searched other offices and private apartments and found “communication devices, documents, and other items.”
A suspected “ringleader” has been charged, according to officers, in advance of a prosecution investigation.
Authorities stated that they were still looking for more “accomplices” and that their own investigation was still ongoing.
Officers went on to say that the primary function of the “exchange” was to enable Russians to “withdraw funds” from abroad.
They asserted that the group primarily employed cryptocurrency as a means of sending money.
Multiple Exchanges Active in Moscow?
In March 2023, multiple reports surfaced claiming Russians were using “several” Moscow crypto exchanges to send the stablecoin Tether (USDT) to people based in the UK.
According to the reports, these exchanges allow Russians to “withdraw cash funds” in the UK by “offering services.”
In May this year, the Russian Central Bank said it had detected a sharp rise in citizens’ transactions on crypto exchanges and peer-to-peer trading platforms.
In Russia, cryptocurrency exchanges do not yet have legal status. However, there are several restrictions regarding the transfer of fiat currency across borders found in Russian law.
Unofficial exchanges have come under fire for allegedly breaking these laws while pretending to offer services for cryptocurrency investments.